The term isoquant—derived from iso, meaning equal, and quant, from quantity—denotes a curve that represents the different combinations of inputs that can be efficiently used to produce a given level of output. Efficiency in this case refers to technical efficiency, meaning the least-cost production of a target level of output. If two units of X and three units of Y can be combined to produce 49 units of output, but they can also be combined less efficiently to produce only 45 units of output, the X = 2, Y = 3 input combination will lie only on the Q = 49 isoquant. The X = 2, Y = 3 combination resulting in Q = 45 is not technologically efficient, because this same input combination can produce a larger output quantity. This combination would not appear in the production function nor on the Q = 45 isoquant. From Table 7.1, it is clear that 91 units of output can be produced efficiently by using the input combinations X = 3, Y = 8; X = 4, Y = 6; X = 6, Y = 4; or X = 8, Y = 3. These four input combinations all lie on the Q = 91 isoquant. Similarly, the combinations X = 6, Y = 10; X = 7, Y = 8; X = 10, Y = 7 all result in 122 units of production and, hence, lie on the Q = 122 isoquant.
These two isoquants are illustrated in Figure 7.4. Each point on the Q = 91 isoquant indicates a different combination of X and Y that can efficiently produce 91 units of output. For example, 91 units can be produced with three units of X and eight units of Y, with four units of X and six units of Y, or with any other combination of X and Y on the isoquant Q = 91. A similar interpretation can be given the isoquant for Q = 122 units of output.
Isoquants for a continuous production function also represent different levels of output. Every point on the Qj isoquant in Figure 7.5(c) represents input combinations that can be used to efficiently produce an equal quantity, or isoquant, of Qa units of output. The isoquant curve Q2 maps out all input combinations that result in Q2 units of production, and so on.
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